The Court of Appeal has refused to strike out a claim for abuse of process despite it being issued after linked proceedings had already gone to trial.
Lord Justice Sales said the claimant in Playboy Club London Ltd v Banca Nazionale Del Lavoro Spa was entitled to have made a claim for damages for deceit by the defendant, and to deny them this chance would have been unfair.
The second set of proceedings was issued in April 2016, three years after the club had started a first claim against the bank for negligence. The club was awarded damages in the negligence claim in 2014 and then issued the deceit claim shortly before the bank’s appeal against that decision. The bank eventually defeated the negligence claim in the Supreme Court when judges ruled that it held no duty of care in respect of a credit reference for a casino patron of the club.
His Honour Judge Bird, sitting in the High Court, had in the meantime struck out the deceit claim on the basis it should have been brought at the same time as the negligence claim. The bank argued it had been an abuse of process for the club to have ‘held back’ its deceit claim and now to pursue it having lost the negligence claim.
But the club insisted it would have been ‘speculative and weak’ to claim for deceit any sooner, and the situation only changed once significant new evidence had become available. The club maintained it was no abuse of process to have started a separate action.
Lord Justice Sales supported that view, suggesting it was right for a party to be ‘reticent’ before pleading fraud or deceit.
‘Courts regard it as improper, and can react very adversely, where speculative claims in fraud are bandied about by a party to litigation without a solid foundation in the evidence,’ said the judge. ‘A party risks the loss of its fund of goodwill and confidence on the part of the court if it makes an allegation of fraud which the court regards as unjustified, and this may affect the court’s reaction to other parts of its case.’
The club, said the judge, was entitled to think ‘long and hard’ about whether to allege fraud, and the new evidence had changed the complexion of the claim.
He maintained there was ‘no manifest unfairness’ in allowing the club to proceed with the deceit proceedings and overturned the decision to strike out the claim.